Bimputh Finance licence cancelled

The Monetary Board has decided to cancel the licence issued to Bimputh Finance PLC (BFP), under the Finance Business Act (FBA) to carry on finance business, with effect from September 1, 2023. 
Accordingly, BFP is not allowed to engage in finance business, with effect from the same date. 
The Central Bank said BFP “has continuously been violating/contravening the provisions of the FBA, several general directions and rules that have been issued, with the view to achieve the overall objective of financial system stability and also specific directions issued to BFP, in order to address the critical financial position of the company”. 

As a result, the financial condition of BFP had been deteriorating, due to the deficient capital level, poor asset quality and continuous losses, the Central Bank said. 
It also said despite several time extensions granted to BFP to comply with the provisions of the FBA, directions and rules issued thereunder and adhere to the Masterplan for Consolidation of Non-Bank Financial Institutions, no satisfactory progress has been made by BFP to revive the critical condition faced by BFP. 

Largely complying with the Monetary Board directions issued, the Central Bank said BFP was able to repay a major portion of its deposit liabilities during 2022. 
The Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) will initiate necessary actions to pay compensation to the unclaimed depositors of BFP, up to a maximum of Rs.1,100,000 per depositor, as per the regulations of the SLDILSS.  Accordingly, all eligible depositors of BFP will be able to recover their deposits in full through the SLDILSS, upon submitting the due claims within two years from the date of cancellation of licence or before the appointment of the liquidator by competent court, whichever occurs earlier as per the regulation of the SLDILSS.  
Further, all debtors of BFP are advised to repay their dues to BFP on time, only through a bank account under the name of BFP and maintain records for all such payments.